Shares rise 0.9% on Europe hopes2 min read . Updated: 24 Oct 2011, 04:19 PM IST
Shares rise 0.9% on Europe hopes
Shares rise 0.9% on Europe hopes
New Delhi: Shares gained 0.92% on Monday after two straight sessions of losses, as hopes for a solution to the euro zone debt crisis encouraged investors, and helped them shrug off the possibility of an interest rate increase by the central bank.
The Reserve Bank of India is widely expected to deliver one final interest rate increase at its policy review on Tuesday and then pause until the end of the fiscal year in March, a Reuters poll showed.
Battered-down stocks in India’s showpiece information technology sector gained, with investors hoping that a stable global economy will boost corporate IT spending.
Market leader Tata Consultancy Services gained 2.9%, while industry bellwether Infosys Ltd jumped 1.6%.
The benchmark 30-share BSE index closed up 153.64 points at 16,939.28, with 7 of its components in the red. The index, which rose as much as 1.9% earlier, is still down nearly 17.4% in 2011.
“Today we are mirroring Asia and Europe, we are hoping against hope that something happens in Europe," said Arun Kejriwal, strategist at research firm KRIS.
Analysts said expectations for a 25 basis point increase in interest rates were mostly factored in Indian shares, one of the worst performing major markets in the world this year.
State-run lender Union Bank Of India slumped 11.4% after its July-September results disappointed, and non-performing assets rose.
“The first PSU (public sector undertaking) bank of (large)size which has reported results is talking of quality of assets getting affected, so the PSU banks came off quite sharply," Kejriwal said.
Bank stocks fell 0.4%, with top lender State Bank of India losing 2%.
ITC Ltd , India’s top cigarette maker, which also makes consumer items and runs hotels, gained 1.5% to 206.95 rupees, after it posted a 21% jump in net profit for the September quarter.
Auto stocks, which have fallen significantly in 2011 on higher cost of vehicle loans, also rose. The ongoing festive season, considered auspicious for new purchases, is likely to boost carmakers’ sales for the current quarter.
Maruti Suzuki , India’s top carmaker, rose 1.6%, while Mahindra & Mahindra , India’s largest utility vehicles maker advanced almost 1%.
Airline stocks rose on hopes the government will approve a plan to allow foreign airlines to buy stakes in Indian carriers.
Kingfisher Airlines gained 0.44%, while Spicejet rose 3.7%. Jet Airways , India’s largest carrier by market share, rose 0.77%.
The broader 50-share NSE index closed 0.96% up at 5,098.35 points.
There were 1.3 gainers for every decliners in the broader market, where 478.7 million shares changed hands.
At 3:47pm, the FTSEurofirst 300 index of top European shares was up 0.48%.
World stocks, as measured by the MSCI world equity index , rose 0.64%.
Some progress was made in Brussels over the weekend, with agreements near on bank recapitalisation and on how to leverage the European Union’s EFSF rescue fund to try to stop bond market contagion.
Polaris Software rose 8.13% after it raised its revenue outlook for 2012 to between 20.1 billion and ₹ 2,060 crore from between ₹ 1,968 crore and ₹ 2,014 crore on Saturday.
Paint maker Akzo Nobel India Ltd fell 9.36% after its parent Akzo Nobel NV abandoned its 2011 core profit guidance and said it would cut 500 million euros ($690 million) of costs, in a bid to offset higher raw material prices and as softening demand spread to China.
Blue Star fell 8.5% after it reported a loss for July-September.